How to load a photosphere for panoramic extraction
If you are in Blender Internal, here is the method used in the reference video.


Move your camera to (0, 0, 0).
Create a sphere Shift+A > Sphere
Assign a material to the sphere and a texture to the material. Set the texture to image and load your image. Enable Shadeless on the material and set the texture's Mapping Coordinates to UV.
Load the texture into the image editor. Go into edit mode of the sphere, select all vertices A and unwrap by pressing U > Sphere Projection.
Set the viewports display mode to Textured Alt+Z or Material. Go into camera view Numpad0. Press Shift+F to look around. (Camera fly mode.)